When offering a loan, lenders have the convenience of submitting one or more offers with their preferred amount. They can then patiently await the acceptance of their loan by a borrower, eliminating the need to actively seek out borrowers.
This streamlined process allows larger lenders to provide substantial loan amounts without the need for detailed oversight or micromanagement.
LTV (Loan-to-Value) is a very important ratio when lending, we advise all lenders to understand the concept before submitting an offer. The LTV ratio is the loan offer compared to the current floor price of the NFT. Higher the LTV, higher the risk.
What happens to my ADA when my loan offer is accepted?
Your ADA will remain staked in your stake pool until it is accepted in a loan offer. As soon as it gets accepted, it will then be instantly sent to the borrower's wallet so they can use it for multiple reasons, therefore leaving your wallet through Levvy's smart contract transaction approval.
What happens to the borrower's NFT if the loan is not paid back?
In the event of loan default, the lender will have the option to foreclose the loan, recieving the NFT utilized as collateral.
What happens to the ADA if the loan is paid back?
Once the repayment is confirmed, the lender receives their ADA back in full + interest - fees. The borrower transfers the loan amount plus any accrued interest, back to the lender's designated wallet through the Levvy smart contract.
With the successful repayment, the lender's involvement in the loan concludes. The lender retains their ADA without any further obligations related to the specific loan agreement.
The ADA provided as a loan will continue to be staked in your stake pool until it is utilized by the borrower.
Moreover, it is important to note that the offered loans do not have a predetermined expiration date.